Currency Market Update - 22nd January 2024

Currency Market Update - 22nd January 2024After a fairly positive week for Sterling, December’s Retail Sales put a halt to this run with poor figures recorded last month. This evidently came as a shock to the markets, but can be pinpointed to the fact that many shoppers took advantage of the late November sales as opposed to usually upping their spending during the festive period.

The knock-on effect here, is that its clear to see consumers are cutting back on their spending outside of sales so therefore gives the Bank of England food for thought regarding their next Interest Rate decision, and whether they fight off all the background noise supporting a cut.

Moving into this week, it’s a pretty quiet calendar until Thursday which brings us The European Central Banks Interest Rate decision. Its pretty much expected that rates will stay unchanged at their current levels, but as ever the conference afterwards with any forward guidance will be what impacts the Euro currency pairs.

Several ECB Speakers have talked down the prospect of any Interest Rate cut by The central bank at the Davos Forum throughout the past week, insisting that a cut will not be considered until at least the middle of 2024. Any deviation away from this would no doubt spring a surprise to the market and therefore we would see the markets react accordingly.



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